Following a compliance assessment in March 2020, the Commission launched a regulatory review of BV Gaming, which uncovered breaches of the licence conditions and codes of practice (LCCP) of its Combined Remote Operating Licence.
The investigation and regulatory review, which covered the period from 1 January 2019 to 12 March 2020, found failings related to the implementation of anti-money laundering (AML) policies, procedures and controls.
In addition, the GC said there were deficiencies in BV Gaming’s responsible gambling policies, procedures, controls and practices, including weaknesses in implementation, as well as breaches of fairness rules.
BV Gaming operates the Betvictor.com, Betvictor.mobi, Hbingo.co.uk, Heartbingo.co.uk and Parimatch.co.uk brands in Britain.
“As a gambling regulator our focus is on ensuring that gambling in Britain is fair, safe and crime-free, and BetVictor failed consumers by breaching rules aimed at achieving these objectives,” the Commission’s director of enforcement Leanne Oxley said.
“Non-compliance – no matter what the reason – will never be a viable business option for gambling businesses. We will always be tough on operators who fail in this way.”
Specific breaches included licence condition 7.1.1(1), which states all licensees must ensure terms are fair as per the Consumer Rights Act 2015.
The Commission said this was an isolated failing and not systemic, but BV Gaming accepted that, at the time, it was not in full compliance with the Competition and Markets Authority (CMA) principles in regard to its terms and conditions for promotions.
In addition, the Committee ruled that it was not clear in its terms and conditions whether the operator would try to repay any deposit balance to the last payment method used by a customer when an account is inactive for 12 months, as required by the Act.
A further breach was identified in relation to licence condition 12.1.1(1), which says licensees must assess of the risks of their business being used for money laundering and terrorist financing, and update this when needed.
BV Gaming admitted its AML risk assessment did not “sufficiently” meet the Commission’s expectations or fully comply with its AML risk assessment.
The assessment also flagged licence condition 12.1.1 (2), which says that after completing the risk assessment, licensees must ensure they have appropriate policies, procedures and controls to prevent money laundering and terrorist financing.
Again, BV Gaming accepted at the time, its policies and processes were not fully compliant, and it was in breach of the condition.
The Commission said it did not find evidence of effective due diligence in the majority of the customer accounts reviewed. In addition, certain customers were able to deposit and spend large sums of money before source of funds and affordability were established.
Customers were also able to continue gambling after hitting the initial trigger as they would not hit further triggers for significant periods.
Another breach related to licence condition 12.1.1(3), which says these policies, procedures and controls must be implemented effectively, kept under review and revised appropriately. BV Gaming admitted its processes were not fully compliant and it needed a more coordinated approach.
Here, the Commission again said there was no evidence of effective due diligence in the majority of the customer accounts reviewed, nor were there controls to ensure restrictions were placed on accounts when requested.
The regulator also noted an “overreliance” on automated thresholds for source-of-funds checks.
The Commission said there was some evidence of regular meetings with customers, particularly looking at the top 25 high-risk customers, but there was no evidence of ongoing monitoring unless they hit the thresholds.
Meanwhile, the regulator also identified a breach of paragraph 1 of licence condition 12.1.2, which requires licensees based abroad to comply with the Money Laundering Regulations 2007.
Furthermore, the Commission noted paragraphs one and two of social responsibility code provision (SRCP) 3.4.1 (Customer Interaction). This licence condition requires operators to have in place policies and procedures for customer interaction where they have concerns about a player’s behaviour.
These policies must include a specific provision for making use of all relevant information to guide and deliver effective customer interaction.
BV Gaming agreed it was not fully in compliance as it failed to implement and follow its policies to ensure “at risk” customers were protected from harm, nor did it make use of all relevant sources of information to ensure effective decision making.
Finally, the Commission identified a breach of SRCP 5.1.9(2), which requires licensees to ensure conditions that apply to marketing incentives are provided “transparently and prominently”.
BV Gaming accepted that significant conditions of a welcome offer were not displayed with sufficient prominence at the point of promotion, despite there being sufficient space to do so.
Analysing its findings, the Commission took into account the serious nature of the breaches, impact on the licensing objectives and the fact that similar cases have been identified with other operators, and so BV Gaming’s management should have been aware of such issues.
The regulator did, however, note a number of mitigating factors including BV Gaming’s early recognition of failings and that it was co-operative throughout the review. The Commission also recognised the steps BV Gaming took to address the issues, including putting in place a remedial action plan within two days of receiving the notice commencing the licence review.
The Commission and BV Gaming reached a regulatory settlement worth £2.0m, including a £1.7m payment in lieu of a financial penalty, £352,000 divestment of gross gaming yield gained as a result of the failings, and £11,000 towards the costs of investigation.